On this page, you’ll find in-depth information on the administrative provisions of the new OIC rule governing the programs used by insurers and third-party administrators for the prior authorization of medical services.

The term “physician” is used on this page primarily for convenience. Other categories of health professionals may also be affected by the new rule. In some case, it may be appropriate to delegate certain actions to non-clinical staff.

TPA = Third-party administrator 

Definitions
Timeframes
Approval expiration
Retroactive denials
Communication requirements
Medical record requests and documentation
Prior authorization program staff requirements
Accreditation
Out-of-network care
Appeals
Advanced authorization for diagnostic or lab services
Facility-to-facility transports
Continuity of care during market withdrawal

Definitions

The OIC provides the following key definitions to clarify and standardize terminology across insurance carriers and their TPAs.

Prior authorization

The OIC defines “prior authorization” as a process that an insurance carrier or TPA requires a physician to follow to determine if a service is covered under their patient’s benefits and meets the requirements for medical necessity, clinical appropriateness, and level of care or effectiveness in relation to the patient’s plan. According to the OIC, this last phrase is used to describe a benefit that will be covered by a patient’s policy, subject to restrictions placed on it by an insurance carrier or TPA.

Under the rule, starting Nov. 1, 2019, insurance carriers and TPAs are responsible for providing a process for physicians to determine all necessary information for a specific patient based on their health plan. (See: Patient-specific information for determination).

The OIC clarifies that prior authorization occurs before the service is delivered, and applies to any term insurance carriers use to describe the process, including “prospective review,” “preauthorization” or “precertification.”

To remove patients from this process, the OIC has determined the responsibility to make a request should reside with a physician or facility, not the patient.

Predetermination request

The OIC defines a “predetermination request” as a voluntary request made by a patient or physician to an insurance carrier or their TPA to determine if a service is a benefit under the patient’s plan.

In its notice in response to the predetermination request, the insurance carrier or TPA clearly state the predetermination is not a prior authorization and does not guarantee services will be covered.

The notices must also disclose:

  • If the service is a benefit.
  • If any preservice requirements apply.
  • If prior authorization is necessary.
  • If a prior authorization request is necessary or if a medical necessity review will be performed after the service has been delivered, that the following information should be included:
    • The clinical review criteria used to evaluate the request.
    • Any required documentation.

Preservice requirement

The OIC defines “preservice requirement” as any condition an insurance carrier places on a physician that may limit their ability to deliver a service to their patient. Examples of a preservice requirement given by the OIC include limits on the type of provider or facility delivering the service, a service that must be provided before a specific service will be authorized, site of care or place of service, and whether physician-administered medications need to be obtained via a specialty pharmacy.

Timeframes

Submitting requests

Prior authorization requests may now be submitted at any time, including outside normal business hours. However, the OIC clarifies that while insurance carriers and TPAs must accept requests at all times, they are not required to start their review until their regular business hours resume. At that point, the rule’s timeframes are in effect and must be met.

Standard prior authorization requests

Insurance carriers and TPAs must make a determination and provide notification on a standard prior authorization request within five calendar days of receipt.

Standard requests are made before a patient receives a service. If a physician submits an incomplete request, insurance carriers and TPAs have five calendar days to request additional information. Physicians then have five calendar days to submit the necessary information.

Starting Nov. 1, 2019, insurance carriers and TPAs are required to provide an online process where the information needed to submit a complete application is specified. (See: Patient-specific information for determination).

Expedited prior authorization

Insurance carriers and TPAs must make a determination and provide notification on an expedited request within two calendar days of receipt.

An expedited prior authorization should be used when, in the professional judgement of a physician, the time it would take to get a standard prior authorization would seriously jeopardize the life or health of an enrollee, seriously jeopardize the ability of the patient to regain maximum function, or the time it would take to receive a standard request would subject their patient to severe pain that cannot be managed without the service in question.

If a physician or facility submits an incomplete request, insurance carriers and their TPAs have one calendar day to request additional information. Physicians then have two calendar days to submit the necessary information.

Starting Nov. 1, 2019, insurance carriers and TPAs are required to provide an online process where the information needed to submit a complete application is specified. (See: Patient-specific information for determination).

Predetermination requests

The insurance carrier or TPA is required to deliver a notice within five days of receipt of a predetermination request.

Emergency services

No prior authorization is needed for emergency services. The OIC clarifies that under current law, insurance carriers and TPAs are not permitted to require prior authorization for emergency services as defined at RCW 48.43.093.

Extenuating circumstances

No prior authorization is needed for “extenuating circumstances.” Extenuating circumstances are unforeseen situations where the timeframes for both standard and expedited prior authorization are insufficient for a physician to receive approval prior to the delivery of a service

The OIC provides the following examples of “extenuating circumstances”:

  • A participating physician or facility is unable to identify from which carrier or its designated or contracted representative to request a prior authorization.
  • A participating physician or facility is unable to anticipate the need for a prior authorization before or while performing a service.
  • An enrollee is discharged from a facility and insufficient time exists for institutional or home health care services to receive approval prior to delivery of the service.

When an insurance carrier or TPA is notified of an extenuating circumstance by a physician or facility (either at the time of claim submission or at the initiation of an appeal) the insurance carrier or TPA must process the claim or appeal without a requirement for prior authorization.

Insurance carriers and TPAs must have an “extenuating circumstances” provision in their prior authorization program. Insurance carriers and TPAs may require physicians and facilities to follow certain policies and procedures for ordering services that qualify for an extenuating circumstance, such as documentation or timeframes for claim submission. These requirements must be posted online. Claims and appeals may still be reviewed for appropriateness, level of care, effectiveness, benefit coverage, and medical necessity under the criteria of the patient’s plan.

Approval expiration

Prior authorization determinations are guaranteed for at least 45 days from the date of approval.

Retroactive denials

Insurance carriers are prohibited from retrospectively denying a prior authorization it has already granted, as provided for at RCW 48.43.525.

Communication requirements

When responding to a prior authorization request, an insurance carrier or TPA must clearly state in their response if the service is approved or denied.

If the request is denied:

  • The response must give the specific reason for the denial in “clear and simple” language. If the request is denied based on medical necessity, the criteria used to make the determination must be given.
  • A written notice of a determination should be communicated to the physician, facility and the patient.
  • If an insurance carrier or TPA provides a decision orally, subsequent written notice must be provided.
  • A denial must include the department, credentials and phone number of the individual who has the authorizing authority to approve or deny the request.
  • A notice regarding an enrollee’s appeal rights must also be included in the communication.

If the request is approved:

  • Approval notifications must inform the requesting physician or the facility and the patient whether the approval is for a specific physician or other provider, or facility.
  • The approval must also state if the authorized service may be delivered by an out-of-network physician or other provider or facility, and if so, disclose to the patient the financial implications for receiving services from an out-of-network provider or facility.

While stopping short of mandating certain communication methods, the OIC clarifies that insurance carriers and TPAs must communicate in a way that is transparent and auditable. Physicians may negotiate with insurance carriers during the contracting process to ensure notification by a certain method.

Medical record requests and documentation

Insurance carriers and TPAs must provide to physicians a process to submit medical records and supporting documentation.

For medical record requests:

  • Insurance carriers and TPAs may only require the portion of the record necessary for the specific request to be determined.
  • Insurance carriers and TPAs must accept any evidence-based information from the physician that will assist in the determination process.

For supporting documentation:

  • Insurance carriers and TPAs must maintain a system of documenting and filing this information until the claim has been adjudicated or the appeals process has been finalized.
  • When requested by a physician, insurance carriers and TPAs must affirm that they received documents.

Under current law, insurance carriers must reimburse for medical record duplication.

Prior authorization program staff requirements

Under current law (RCW 48.43.016), an insurance carrier’s prior authorization program must be staffed by health care professionals who are licensed, certified or registered, are in good standing, and must be in the same or related field as the provider who submitted the request, or of a specialty whose practice entails the same or similar covered health care service.

A denial must include the department and credentials of the individual who has the authorizing authority to approve or deny the request and must also include the phone number to contact the authorizing authority and a notice regarding an enrollee’s appeal rights.

Accreditation

The prior authorization program of an insurance carrier or TPA must meet the standards set forth by a national accreditation organization, including (but not limited to):

  • National Committee for Quality Assurance
  • URAC
  • Joint Commission
  • Accreditation Association for Ambulatory Health Care

While insurance carriers and TPAs must adhere to the standards set forth by an accrediting organization, they are not required to receive the actual accreditation.

Out-of-network care

Insurance carriers and TPAs must have a process that permits out-of-network physicians and facilities to access preservice requirements and request a prior authorization. This provision does not apply to integrated delivery systems.

Approval notifications must state if the authorized service may be delivered by an out-of-network physician or other provider or facility, and if so, disclose to the patient the financial implications for receiving services from an out-of-network provider.

Appeals

The results of a prior authorization decision are not final; physicians and other facilities have the ability to appeal a prior authorization denial. A physician can file an appeal of a prior authorization denial without written permission of the patient.

Advanced authorization for diagnostic or lab services

To prevent patients from traveling long distances only to be evaluated and sent home to wait for authorization of a required service, specialists must be permitted by insurance carriers and TPAs to request a prior authorization for a diagnostic or laboratory service based upon advanced review of the medical record, so that appropriate services can be delivered at the initial appointment.

Facility-to-facility transports

According to the OIC, most requests for non-emergency single ambulance transports occur with little or no notice to ambulance providers. Retrospective review is provided for facility-to-facility ambulance transport so that ambulance providers may be reimbursed for their services if the patient’s plan includes coverage of that service.

If timeframes allow for a prior authorization, referring providers are responsible for the request.

Continuity of care during market withdrawal

When an enrollee must change plans due to an insurance carrier’s market withdrawal, the new insurance carrier or TPA must honor the prior authorization of the previous insurance carrier and ensure the patient receives the previously authorized service as an in-network service.

When an unexpected market withdrawal occurs, the new insurance carrier or TPA must recognize:

  • A prior authorization for medical services for at least thirty days or the expiration date of the original prior authorization, whichever is shorter.
  • A prior authorization for pharmacy services for the initial fill or until the prior authorization process of the new carrier or TPA has been completed.